OBJECTIVES: To compare the costs and benefits, from a health plan perspective, of contraceptive methods currently marketed in the United States among individuals desiring long-term contraception. METHODS: A semi-Markov model was constructed to compare cost-effectiveness among 14 contraceptive strategies (including injectables, implants, oral contraceptives, IUDs, barrier methods, and surgical methods). Primary health states included method discontinuation, initial/continued use, method failure and plan disenrollment with transitions every year for five years. Costs for method failure, other discontinuation, and method-related events (amenorrhea, hysterectomy, menorrhagia, urinary tract infection, and venous thromboembolism) are included in the model. Baseline event rates, costs, and method effects on rates were derived from a comprehensive literature review, average wholesale drug prices, and the 2000 Medicare Reimbursement Fee Schedule, in conjunction with expert opinion. One-way sensitivity analyses were performed on several key variables. RESULTS: The five most effective methods were vasectomy, tubal ligation, implant, progestin-releasing IUD, and copper IUD, with average effectiveness of (99.9%, 99.8%, 98.6%, 98.2% and 97.8%, respectively). The five least expensive methods were vasectomy, progestin-releasing IUD, copper IUD, implant, and injectables with respective five-year costs/person of $800, $1,196, $1,217, $1,237, and $1,764. Vasectomy dominated other methods over five years. After excluding vasectomy, progestin-releasing IUD, implant and tubal ligation dominated, with a marginal cost-effectiveness of $71 per additional percent of effectiveness between progestin-releasing IUD and implant, and $958 between progestin-releasing IUD and tubal ligation. The cost-effectiveness ranking among methods did not vary significantly in most sensitivity analyses except those based on method costs. CONCLUSIONS: Over five years, vasectomy is the most cost-effective long-term contraceptive strategy. Among long-term contraceptive options for women, progestin-releasing IUD had a lower cost-effectiveness ratio than either implant or tubal ligation and dominated all other methods.